Credit standards remain tight and high interest rates held down loan growth according to the latest Beige Book published Wednesday by the Federal Reserve.
The report is based on information collected from the 12 Federal Reserve Bank districts in mid-May. The Beige Book is published eight times a year and characterizes regional economic conditions and prospects based on a variety of mostly qualitative information, gathered directly from each district’s sources.
Overall, the report found that national economic activity expanded from early April to mid-May. However, higher interest rates were having an effect. Even though housing demand rose modestly during the reporting period, the report stated, and single-family construction increased, there were reports of rising rates affecting sales activity.
Meanwhile, the report found, conditions in commercial real estate (CRE) softened amid supply concerns, tight credit conditions, and elevated borrowing costs. Auto sales were flat, the report found, with some areas noting that manufacturers were offering incentives to spur sales.
Regarding the national outlook, the report found that it was “somewhat more pessimistic amid reports of rising uncertainty and greater downside risks.”